Podrinje region is almost exclusively populated by Serbs even though it used to be mainly Muslim populated region. Muslim returnee population lives in extreme poverty in remote rural enclaves without any labor market participation and almost no return to towns. Successful returnees are surviving on extensive land cultivation and cattle breeding with no cash revenue, while other depend on humanitarian aid. Muslim returnee population is constantly under economic pressure to sell its property in Podrinje region in order to seek better life in Muslim controlled regions of Bosnia and Herzegovina or in western countries. Muslim refugees and their offspring dispersed all over the world, after 10 years of exodus, are not interested to return to hostile environment. 

Osat region is situated in Central East Bosnia and Herzegovina literally on boarder with Serbia and Montenegro. In this fertile valley of river Drina 900 out of 5.500 of pre aggression Bosnian Muslims have decided to return on land of their grandfathers. Before the Serbian aggression 1992-1995 there were 1.800 pupils only in Osat elementary school while currently only 24 pupils attend the same school. Approximately one hundred children bellow eighteen years old from Osat region is undertaking schooling programs in other elementary and secondary schools in Srebrenica municipality.

The returnees are mostly young and middle aged men and woman able to work and earn their own income but unfortunately deprived of access to financing to start their traditional household income generation namely cattle breeding, bee keeping and fruit growing.

The BH IIUM Alumni is an association of students who obtained their undergraduate, postgraduate or doctoral degrees in the fields of humanities, Islamic and technical sciences from the International Islamic Universities Malaysia in Kuala Lumpur. The Alumni also include, as affiliated members, graduates of all other Malaysian universities, such as the Multi-Media University (MMU), University Malaya, etc. In terms of membership, the Alumni includes more than one hundred of graduates, as well as holders of master’s and Ph.D. degrees in all fields of knowledge who have so far returned to Bosnia after completion of their studies and now hold very responsible offices in governmental and NGO sectors, as well as business and non-profit sectors.

The objective of the Association is to contribute to the social dialogue and development in B&H, promote the University and establish links with students from other countries who studied at IIUM and who are now working all over the world.

Among various activities planned for 2005/2006 season, the BH IIUM Alumni is proud to mention its community services especially support to returnees in Osat region. The BH IIUM Alumni is financing 38 monthly scholarships for pupils and 2 monthly financial assistance to their Muslim teachers, supplying them with winter clothes, Muslim educational child magazines, health care for sick pupils in Sarajevo Medical Center, purchase and distribution of Qurban and Bosnian Muslim confidence building.

«Prosvjetitelj» is local nongovernmental organization established 1993. Today «Prosvjetitelj» is only NGO with its headquarters in Srebrenica. Members of «Prosvjetitelj» are young returnees to the area of Srebrenica whose goal is to provide sustainable development opportunities to returned families and foster economic development in the region.  Until today they have implemented numerous projects in the field of education and economic development in cooperation with the Office of the Mufti of Tuzla, NGO “Sadake” (Germany) and BH IIUM Alumni.

In process of preparation of this project, BH IIUM Alumni has evaluated various projects that have been attempted to improve income generation of returnees. According to these experiences we have decided to propose concept of benevolent loan (Qard Hasan) for specific reasons. All in-kind-loans have proven to be extremely difficult to manage. Disputes often arise due to problem of measurability of return. However, that does not mean that this project is offering only cash to beneficiaries. In addition to that the project is design to offer free business consulting. The implementer has working on a number of programs that it will offer to loan beneficiaries. These include: sheep breeding, Qurban breeding, purchase of equipment for land cultivation, honeybee-keeping, and probably raspberry growing. In addition to providing free business consulting the implementer may assist in finding market for the products, as might be the case with qurbans and honey. However, the beneficiary will be making decisions as to the kind of investment he/she wants to make and therefore will be solely responsible for the outcomes of the enterprise.

In order to secure the repayment of benevolent loans we planned to ask for two guarantors and collateral on items or animals financed by the loan.  Tenure of the loan would be 36 months with grace period averaging 6 months. This would secure financing for all eight to ten beneficiaries within two years. Benevolent loan agreement shall be designed on experience of the Office of the Mufti of Tuzla, Islamic Relief and Bosna Bank International. Six percent (6%) of the total amount will be granted to the local partner (Prosvjetitelj, Srebrenica) for the administration of the project. That would be the only cost of loan for the beneficiaries.

First phase is identification of potential beneficiaries what has been already done by Prosvjetitelj Srebrenica. All potential beneficiaries have opted for procurement of sheep while one beneficiary, due to his family condition, has chosen steers.

In order to acquire the most relevant market condition we have contacted various parties. Among others we have establish communication with Project Coordination Unit of Federal Ministry of Agriculture, Water Management and Forestry. They have offered their expertise in the animal selection, marking and training of beneficiaries free of charge. The PCU has suggested defining repayment period to 3 years in order to provide optimal time and burden to our beneficiaries. Selection of sheep is extremely important and beneficiaries are encouraged to procure crossbred sheep traditionally present in the region. It is optimal to procure 18 young female and 1 male.  

Our projections are that market value of well build sheep in April 2006 is equivalent to KM 250,00 including medical check up and transportation to Osat region.

It is expected that by the implementation of the project 4-5 families will directly benefit from the first phase while additional 4-5 families will benefit from the second phase. Those beneficiaries will be able to provide their families job to do, income to earn and opportunity for sustainable development. In total, more than 30 individuals will directly benefit from the project. It is direct support for the sustainable return to Osat area – Srebrenica municipality.      

The implementer is obliged to design benevolent loan contract with beneficiaries that will protect the interest of the creditor and provide long-term continuity of the project. The implementer will be obliged to coordinate the preparation, implementation and monitoring of the project.

In this project, the implementer is going to use a modified version of follow up mechanism of Grameen Bank of Bangladesh and Amanah Ikhtiyar of Malaysia that is based on the principle described bellow. The implementer is going to identify 8-10 potential beneficiaries. The benevolent loan shall be given only to 4-5 of them. The others will be waiting for first group to repay their benevolent loan in order to get loan themselves. Local partner (“Prosvjetitelj”) will be monitoring and following up implementation of the project. In process of monitoring local partner will be assisted by the second group of beneficiaries and will report to the implementer. If they identify any deviation of beneficiaries that can endanger the interest of all stakeholders in this project they shall notify the implementer. The implementer will act promptly to protect interest of the creditor and in extreme case will confiscate the animals/ items and give them to next beneficiary in line.

February-March 2006: The data will be gathered on potential beneficiaries, they will be selected and contracts would be signed with the implementer.

The implementer of the Project has identified candidates that have independently chosen any of the offered programs. A successful candidate has satisfy following criteria:
·    Be returnee that inhabits Osat region during whole year, preferably bellow 45 years old with established family and schooling children;
·    Should have required business experience, infrastructure, labor and working capital;
·    Be reputable in the Osat community and trustworthy person that is able to secure recommendation from the NGO «Prosvjetitelj»;
·    Be able to provide two acceptable guarantors for the benevolent loan preferably from Federation of BiH, and
·    Be involved in implementation of NO other incompatible projects.